NEW YORK (AP) — When corporate profits are on the upswing, as they seem to be for the first time in more than a year, investors usually get excited. These are not usual times.

The reaction has been more "phew" than "hooray" for many fund managers this earnings reporting season, even with the Standard & Poor's 500 index on pace to report its first quarter of profit growth since the spring of 2015. The subdued reaction is the result of how expensive stocks have become. Earnings need to rise even faster than they are now to justify the market's lofty prices.

The U.S. stock market "is certainly priced for perfection," says Maura Murphy, co-portfolio manager of the Loomis Sayles Multi-Asset Income fund. "If we don't see earnings pick up, that's a real risk because valuations are stretched."

Roughly half of the companies in the Standard & Poor's 500 index have already reported their results for the July-through-September quarter, and gains for banks and health care companies look to be offsetting continued drops for oil producers. Analysts expect to see earnings growth of 1.1 percent for the S&P 500 in the third quarter from a year earlier, according to FactSet. While that's certainly low, it's at least moving in the right direction.

Investors are banking on the gains getting even bigger. That's why investors continued to pay high prices for stocks over the last year, even as corporate profits dripped lower. Murphy says she expects growth to get back to the "high single-digit" percentage level that investors appear to be expecting, as interest rates remain low and the economy continues its modest pace forward.

Wall Street analysts are even more optimistic, and they are forecasting earnings growth of nearly 13 percent in 2017 for the S&P 500, according to FactSet. They foresee particularly big gains for energy companies on the assumption that the price of oil continues its recovery following its 70 percent plunge over 19 months from the summer of 2014 through early this year.

Others aren't so sure. Stephen Auth, chief investment officer for equities at Federated Investors, says he is feeling cautious about the market in the near term, even though he's optimistic about the long term, because growth in both corporate earnings and the economy has been sluggish.

He sees low interest rates hemming in profits for financial companies, and he doesn't see the price of oil making a big leap, a requirement for the energy sector to rebound. That's why he wouldn't be surprised to see the stock market stumble in the short term, before continuing to rise.


Strategists at Goldman Sachs recently ratcheted back their forecasts for S&P 500 earnings growth in 2016 and 2017. They expect the S&P 500 to end this year at 2,100, nearly 2 percent lower than Wednesday's closing level. The strategists are calling for the index to rise nearly 5 percent in 2017 to 2,200.

Fund managers want to see bigger earnings growth because stock prices have historically tracked corporate earnings trends. That's why the price-earnings ratio is a bedrock method used by many investors to measure whether a stock, or the market, is too expensive.

To see how pricey stocks have become, consider Exxon Mobil. Its share price earlier this month was 35 times larger than its earnings per share from the prior 12 months. That's much higher than its average price-earnings ratio of 12.8 over the last decade. The only way for Exxon Mobil's price-earnings ratio to get back to its historical average is either for its stock price to drop or for its earnings to get much bigger.

Exxon Mobil may be an extreme example because it's part of an energy sector that's struggling with the plummet in oil prices, but the overall S&P 500 is also trading at a significantly higher price-earnings ratio than its average over the last decade, 18 versus 14.8, according to FactSet.

"Most people that I talk to feel that valuations are stretched," Federated's Auth says.

Author: STAN CHOE AP Business Writer 

Uber has already mastered moving people and food around cities. Now it's getting into the long-haul business with a new division called Uber Freight.

The plan builds on Uber's acquisition of Otto, a self-driving trucking company that Uber bought in July for $65 million.

Otto's main focus was to build self-driving truck kits that equipment manufacturers or freight networks could buy and install on their own, but it also secretly harbored a desire to build its own "Uber for trucking" marketplace.

"Even if you look pre-acquisition, Otto was always about reinventing transportation," Eric Berdinis, the product lead on Uber Freight, told Business Insider. "Even though we started with the announcement of the self-driving trucks, we were always intending to build a marketplace that would allow self-driving trucks to flourish."

Those plans have accelerated, and in the four months since it was acquired by Uber, the company has already soft-launched its new trucking business, Uber Freight.

Uber's new marketplace

Uber has been up-front about its ambitions: In an interview with Business Insider, CEO Travis Kalanick said the company is definitely "getting in the trucking business."

"It is a challenging, interesting, nuanced business, and it is going to be intense getting into it, but that's exciting to me," Kalanick said.

The first product from Uber Freight is a marketplace to connect a shipper with a truck, much like the Uber app connects drivers and riders.

The way most shipping works for most companies today is by going through a brokerage firm, which makes calls to trucking companies and arranges the best deals for its customers. The broker takes a commission of between 15 and 20%.

To start, the Uber Freight marketplace will eliminate that middleman and offer shippers real-time pricing of what it will cost to move their goods based on supply and demand. And yes, that might mean there's even surge pricing for trucks, although a lot of the marketplace details are still being worked out.

While a dynamic pricing model might mean a higher or lower price than a deal with a broker, Berdinis believes that eliminating the broker will still be a more cost-effective model.

"You're going to save money by having real-time pricing," he said. "Having a middleman who is essentially making phone calls all day long at its very core is not efficient."

Building Uber Freight

Startups such as Convoy and CargoX are trying to build their own "Uber for trucking services,"having seen the same opportunity that the Otto team is working on now, but it's a tough nut to crack. One such startup, Cargomatic, has burned through millions and pivoted away from the space entirely.

Berdinis is betting that Uber's intellectual property and worldwide operations team will make Uber Freight the winner in the "Uber for trucking" space.

"We're talking about shipping hundreds of thousands of dollars. You need a company that has scale to be able to handle this," Berdinis said, pointing out that Uber already has offices around the globe.

After the acquisition, a cross-section of logistics and operations experts moved into Otto headquarters for the joint product. Job listings for Otto show that the company is actively hiring to fill operations manager roles for Uber Freight in both San Francisco and Chicago, the epicenter of freight brokerage.

Still, it's not as easy as putting a new coat of paint on the Uber app and saying it works for trucks.
A lot of work goes into load-matching, like pairing a hazardous materials load with a hazmat truck.

There's also the challenge of dealing with an industry that's often using disparate and antiquated systems. When Berdinis toured one company's office, his team spotted holes in all of the tables — the typewriters had apparently been recently removed.

Eventually, the Uber Freight team wants to tackle other legacy products in the industry as well, such as replacing time sheets for human drivers.

"The toughest thing about entering into the world of freight is that the systems that the people we're working with are used to using are extremely legacy," Berdinis said. "There's also a more physical shift of using products that are cloud based instead of sitting next to a rack of servers."

How it fits into the big picture at Uber

If Uber Freight is successful at making the "Uber for trucking," it could serve as a gateway for autonomous vehicles. Carriers and shippers who sign up for Uber Freight will be the first customers for the Otto self-driving kit.

"If they're willing to work with us and they want to join early, then they'll be the first to benefit from the self-driving technology," Berdinis said.

The approach is similar to how Uber plans to integrate its self-driving cars into the Uber network. Self-driving vehicles won't be substitutes for human drivers in all situations — they'll simply be part of the marketplace as they come online.

"The way we think about the future is two things: marketplace and automation. And that will apply on the consumer side and the freight side," Berdinis said.

With a shipper's permission, Uber will be able to take data from the Uber Freight app, like how often someone is braking or where they're accelerating, to help train its autonomous driving systems.

The Uber Freight marketplace has soft-launched and is working with a handful of shippers and carriers over the next few months before officially launching early next year.

To the naysayers, Berdinis offers the following:

"Maybe some might be skeptical that it's happening next week, but if you think 50 years from now there's still going to be people calling trucks to find out where the truck is when GPS was invented 80 years ago, we know that that's not possible. The future can't be that way, and we know we're marching down the right path."

Biz Carson - Published by Business Insider. 

Last Wednesday, U.S. Department of Transportation Secretary Anthony Foxx announced a new advisory committee on autonomous vehicles. The committee’s mission: develop recommendations for how automated technology can transform the way we move people and goods, on our roads and railroads and in our airspace.
Thinking about autonomous vehicles holistically is to be applauded. Yet automation on land still seems to dominate the conversation. You’ve likely seen the headlines about driverless cars, buses, and trains: Tesla launches Autopilot and Elon Musk proposes the Hyperloop. Google’s driverless car logs 700,000 miles on the roads of California and Nevada. Toyota, BMW, Daimler, and others invest billions in technologies that could allow humans to take their hands off the wheel.
But it’s another technology altogether that will dominate the future of autonomous navigation: drones. It is autonomous aircraft, not cars, that have the advantages that will make widespread adoption of vehicles without human operators possible in the very near future.  Here are four reasons why the future of autonomy is about drones, not driverless cars.

1. We can design low-altitude airspace for drones, not humans.
From the very beginning, our network of roads, highways, bridges, and overpasses has been built on the premise of human drivers. The roadways are static, the street signs are static, and traffic flows much as it did when the first roads were mere dirt paths.  If we designed our cities anew today, we’d create a fundamentally different traffic system: cloud-based and capable of microscale adjustments to efficiently manage millions of cars in constant communication with each other and the network.
An onboard driverless navigation system isn’t enough to make a car autonomous; these vehicles will also need help from high definition maps, real-time road capture via computer vision, an integrated network that connects each car with other driverless vehicles, and a constant flow of information about obstacles, hazards, and traffic. And as driverless cars come online, they won’t be replacing human-operated cars altogether. Instead, they will be sharing the roads…and with human drivers comes human error. Safe, autonomous driving will be difficult to accomplish until every car is a driverless one.
Low-altitude airspace, on the other hand, is largely untouched. As drones take to the skies, industry stakeholders have the opportunity to build a network that is designed to accommodate autonomous navigation from the very beginning: digital, connected, and data-driven.

2.  Traveling in three dimensions offers more flexibility than two.
The path a car travels is often simpler than the one a drone must fly, but it is also lacking in flexibility.
Cars are constrained by the road itself, and by the two dimensions in which they travel: forward and backward, right and left. Drones have more degrees of freedom, able to maneuver in 400 feet of airspace. As autonomous flight becomes the norm, this means that adjusting routes to avoid obstacles, hazards, and other constraints will be far easier for a small, nimble drone than a car constrained by the lanes of the highway.

3.  An open platform accelerates innovation.
Car companies have long competed with each other, and driverless technology is no exception. Autonomous navigation technology is being built vertically: each automaker is a closed system, making it difficult for second party developers (such as a contractor building a feature for a vehicle) or third party innovators (such as the inventors of a new app) to leverage autonomous vehicle platforms at scale.
We’ve seen before that open platforms can fast-track innovation. Consider the impact that the internet, the ultimate open platform, has had on our world. Or consider how Apple, one of the most ubiquitous tech companies in history, owes the success of the iPhone in large part to opening up the app store to third party developers.
This is a remarkable advantage for drones. Unmanned aircraft are part of a much more democratic system. While some drone technologies are proprietary, there is tremendous collaboration across platforms and between hardware manufacturers, software developers, and service providers. These partnerships will amplify and enable innovation for the entire industry because anyone can invent a solution that powers or is enabled by a drone.

4.  An affordable technology is an accessible one.
The price of entry into the automotive market is incredibly steep, and the industry is full of established, well-funded players. In contrast, drones can be purchased at a wide range of price points, opening the ecosystem to many more innovators and entrepreneurs. Buying a drone to test a new application, experiment with a new business model, or start a new company is relatively affordable. The result: drone technology can be adopted quickly, drone businesses can iterate rapidly, and new innovations can take root.
Taken together, these advantages suggest that millions of autonomous drones will fly our skies long before millions of fully autonomous cars travel our roads.
Perhaps we might even ride in flying cars before we ride in driverless ones.

By: Gregory S. McNeal

This article is coauthored with Daniel Rubio, CTO of AirMap and the former CTO of road-mapping platform for autonomous vehicles HERE.

WEARE TOWNSHIP, Mich. (WOOD) — Nearly 150,000 pounds of apples were spilled when a semi-truck heading from Sparta to Ludington rolled over on US-31 in Oceana County Tuesday morning, northern Michigan news outlets report.

The crash happened around 10 a.m. near Monroe Road in Weare Township, near Pentwater, the Oceana County Press reports.

The semi was hauling about 80,000 apples weighing in at about 149,000 pounds, according to the Press. They were meant to be used in making applesauce. Photos from the scene show the semi trailer overturned, smashed crates and the apples scattered across the median.

The semi driver, 62-year-old Dennis Radford of Grand Rapids, told the Press he doesn’t know what caused it.

“It happened so fast,” he told the Press. “I was driving along, hit the brakes, and I ended up here. … Some rescue guys came right away, cut the seatbelt loose, and got me out.”
​
He sustained minor injuries and was treated at the scene.

​COPENHAGEN, Oct 11 (Reuters) – Danish anglers could be in for the fishing trip of their lives in a few days’ time, after a ship crashed into a fish farm and caused up to 80,000 rainbow trout to escape into the open sea.

The cargo vessel, sailing from the Russian enclave of Kaliningrad on the Baltic Sea to Kolding in Denmark, collided with the fish farm between the Danish islands Funen and Jutland on Tuesday, aquafarming firm Snaptun Fisk told Reuters.

The trout, weighing about 3 kg (6.6 lb) each, had been due to be slaughtered this week and were worth up to 10 million Danish crowns ($1.5 million), said Tim Petersen, co-owner and director at Snaptun Fisk.

“We will seek compensation from the shipowners,” he told Reuters.

The incident could damage the sea habitat, said Danish Technical University Aqua researcher Jon Svendsen. The escapees are likely to disturb the eggs and young of wild sea trout.

The rainbow trout, unused to life in the open sea, should only survive a few months.

“All sports fishermen should get out there with their gear and start fishing,” Soren Knabe, director of fishing association Vandpleje Fyn, told local broadcaster TV2/Fyn.

The trout will begin to bite after four to five days as they adjust to life in open waters, said Ulrik Jeppesen, a local angler, recalling similar previous incidents.

“I see this as a bit of a tragedy (for the environment), to be honest,” he said. “But I will probably make a trip or two out there.” (Reporting by Annabella Pultz Nielsen and Jacob Gronholt-Pedersen; editing by Andrew Roche)

Reuters